Nel ASA's Order Pipeline Stretches to 2028 While SB1 Markets Trims Target to NOK 0.30

Nel booked a USD 20M Collins Aerospace electrolyser order for 2027-2028 delivery, while SB1 Markets cut its target to NOK 0.30 and kept a sell rating.

Nel ASA finds itself caught between a lengthening order pipeline and a market that wants proof of near-term profitability. The Norwegian hydrogen specialist has been steadily filling its books with specialised contracts, yet the cash tied to those wins sits years away from the income statement — a timing gap that has done little to lift sentiment around the stock.

The most visible example sits in the defence niche. Through its US subsidiary Nel Hydrogen US, the company secured work from Collins Aerospace worth roughly USD 20 million, booked during the third quarter of 2026. The hardware in question is PEM electrolyser stacks destined for oxygen generation inside submarine life-support systems. Deliveries, however, will not begin until 2027 and will run through 2028, spanning programmes for the US Navy as well as British and French submarine fleets. A single sub-order accounts for about USD 12 million of the total. Since the deal surfaced just over a week ago, the share price has slipped 0.9%, a muted reaction that underscores how little immediate earnings support the contract provides.

Analyst scepticism deepens

Not everyone is waiting patiently for that revenue to land. On 29 September, SB1 Markets cut its price target on the stock from NOK 0.50 to NOK 0.30 and left its sell recommendation in place. Analyst Andreas Skeisvoll Grimsmo pointed to stubbornly difficult conditions in the global electrolyser market, singling out persistent overcapacity and Nel's low single-digit share of worldwide demand. In the brokerage's view, the company lacks a dependable route to operating profitability, and over the longer haul it may need to raise fresh equity. Media reports suggest the firm also trimmed its operating earnings forecasts in the wake of the downgrade.

Those revisions capture a broader disillusionment with the slow build-out of the hydrogen economy. Heavy fixed costs and sluggish order intake continue to weigh on the sector as a whole, and Nel is not immune to that pressure.

Splitting stack production from system assembly

On the operational front, the company has been reworking how it serves European customers. About a month ago it signed a framework agreement with the service provider Hydrasun — a development followed by a 2.1% decline in the share price. Under the arrangement, assembly and integration capacity for Nel's MC series will be established in Aberdeen. Core manufacturing of the PEM electrolyser stacks stays at the company's US plant in Wallingford, Connecticut, keeping the critical production step separate from the later system integration work carried out on British soil. The logic is straightforward: serve local customers faster without dismantling the central manufacturing base.

A market waiting for the numbers

Trading has reflected the cautious mood. The stock closed yesterday at EUR 0.1906, a daily move of -1.6%, and pre-market indications put it at EUR 0.1902. Year-to-date the shares have managed a modest gain of 0.7%, but they remain 48% below their 52-week high. Market capitalisation stands at roughly EUR 356.20 million.

Attention now turns to the upcoming interim report, where investors will be looking for signs that the operating cash burn is easing and for clues on margin development. Management's outlook on future capacity utilisation will carry similar weight. The strategic moves — deepening a defence niche and extending European assembly reach — do strengthen Nel's position in specialised segments. But with deliveries not starting until 2027, the real operational test is still some way off.